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What are all those hidden folders then?

If you press the Command, Shift, and Period/Stop keys in the Finder, you’ll see plenty of files and folders which are normally hidden from view. This article is a quick introduction to the most frequently-encountered hidden items, at the root level of volumes, and at the top level of your Home folder.

Different versions of macOS use different files and folders, and those from older versions may be migrated over to new systems. Some third-party apps and tools also create their own hidden files and folders, particularly at the top level of your Home folder.

Root level of a volume, including the boot volume – folders

.DS_Store – custom attributes of the containing folder, such as icon positions, can be found in any folder

.fseventsd/ ⛔️ – macOS FSEvents records, which record changes to the file system and are used by Time Machine to determine what to back up. Stored individually on each mounted volume.

.PKInstallSandboxManager/ – used for software updates and the Sandbox

.PKInstallSandboxManager-SystemSoftware/ 🔑 – used for system software updates

.Spotlight-V100/ ⛔️ – Spotlight metadata, stored individually on each mounted volume. These are compiled by mdworker processes, and are used by Spotlight search, other macOS-based search features, and Time Machine.

Thank you.
Yes, if there’s an Icon? file of type icon and creator MACS, it will display a custom icon for the folder.
The Icon? file has an empty data fork, and a resource fork (xattr type com.apple.ResourceFork) containing what looks like an old Classic icns resource. If you’ve got an app which can read that old format, it should be able to open it. I don’t know of an app which would, but maybe GraphicConverter?
Howard.